COLOMBO, SRI LANKA
— Last July Sri Lanka's most important moderate Tamil leader was killed here - blown up by a suicide bomber. Neelan Tiruchelvam, who was also the country's leading constitutional scholar and reformer, was supposed to leave the next day for a fellowship at Harvard University.

Instead, he joined Sri Lanka's decade-long list of leaders killed for their political views. That list includes a president, two party leaders, a minister of defense, a presidential candidate, and more than a dozen others - including Indian Prime Minster Rajiv Gandhi.

But in recent weeks, and for the first time, the two main parties have agreed to a process leading to more local powers and minority rights - a reform Mr. Tiruchelvam co-authored.

The reform process has a steep uphill climb. Today, on this teardrop-shaped island off India's southeast coast, one of the fiercest wars anywhere is under way in jungles five hours from the capital. An ethnic-Tamil movement, the Liberation Tigers of Tamil Eelam (LTTE), has fought the ethnic-Sinhalese majority government for 17 years. Colombo's population has grown accustomed to sand-bagged checkpoints guarding French delis, and tourism to this sunny island has returned.

But countless villages have been destroyed, 60,000 are dead in a war that consumes 30 percent of the national budget, and military morale is low after an intensified battle in the fall when Tiger forces overran positions that took the government four years to win.

Most important, perhaps, is that from the Tiger point of view, only two outcomes are acceptable: death, or a separate state. Led by the reclusive and charismatic Velupillai Prabhakaran, the Tigers control a large jungle patch in the north. In the past two years the Tigers have projected their power far down the east coast as well - with squads of men, women, and children using names like "Black Tigers," "Birds of Freedom," "Tiger Cubs," and "Leopards."

Last week, for example, a bomb planted under the outgoing mail in a crowded post office killed 11 and wounded at least 70. In December, just days before President Chandrika Kumaratunga was elected to a new six-year term, a Black Tiger suicide bomber penetrated a Colombo rally, killing several and wounding the president, who lost the use of one eye.

Few Sri Lankans think a constitutional reform process will end the war. Yet given unyielding positions on both sides, many hope a reform to share power with aggrieved minorities will, in the long run, begin to isolate the Tigers. The peace package was first championed by Mrs. Kumaratunga in 1994, but derailed by the opposition United National Party (UNP), and it has been a central debate among Colombo elite.

"Power sharing is the most important question..., even more important than whether to talk with the LTTE," says Jehar Perera, spokesman for the National Peace Council of Sri Lanka. "If it happens, it will be the first time in history our two parties have agreed to help solve the Tamil problem. It will send the message to the Tamil people that the Sinhalese have changed."

Skeptical voices say the situation is more akin to Northern Ireland or the Philippines - which have taken years to make progress.

Easily marginalized on a scale of strategic importance, Sri Lanka is still a test case on the international stage, say regional experts. The test is whether all voices of moderation can be silenced by killings, whether Sri Lanka can accommodate ethnic aspirations, and whether a civil society that allows for improved investment, tourism, peace, and education will be possible.

Indeed, the severity of the war cannot be overstated. "You get headlines when Russia loses 1,000 troops taking Grozny," says a Colombo-based diplomat. "I can think of three times in the past year when the Sri Lankans have lost 1,000 in a week."

Yet the palm-lined streets of this clean and well-preserved colonial-era city, a place where the British held horse races on the beach, tell little of that story. A visitor cannot visibly distinguish between the Hindu Tamils and the Buddhist Sinhalese. But neither can most police, who often round up hundreds of Tamil youths based on the give-away names on identity cards and legally detain them for up to a year without trial.

The Tamils, less than one-fifth the Sri Lankan population of 18 million, have by all accounts fared worse since independence in 1948. They tell of fewer jobs, language restrictions, a discriminatory Constitution, and an open "Tamil-crushing" policy in the 1980s.

Not until Kumaratunga was elected in '94 did the majority Sinhalese even acknowledge that the Tamils had grievances. Today, a consensus exists among average Sinhalese that something must be done about "the Tamil problem." But the average Tamil is not so sanguine. They remember promises by Kumaratunga that were not kept.

"Most Tamils do not feel the government is sincere about this power sharing," says a Tamil analyst. "Power sharing looks like a marginal answer that won't meet the expectations of minorities."

Two things have recently changed.

One is the agreement by opposition leader Ranil Wickremesinghe to support the president. For more than a decade, LTTE leaders have counted on the Sinhalese to be divided and ineffective. Yet in a mid-January speech in Parliament, Mr. Wickremesinghe gave his nod.

"For whatever Machiavellian reason, the opposition has said yes," says Radhika Coomaraswamy, organizer of a conference here this week in Tiruchelvam's honor. "Regardless of the motives, they are committed to the process."

Taking advantage of this opening, the president is starting a crash program. She will meet with her coalition, the Tamil and Muslim minorities, the UNP, and finally will offer the package to the LTTE - all in the next two months.

"She is trying to do in four weeks what she could not do in four years," says one dubious but hopeful supporter.

The second change is a first-ever willingness by the government to bring in an outside mediator - Norway has shown interest - to negotiate with the LTTE. The tactic seems a way to isolate the Tigers, and to force Mr. Prabhakaran, who has not communicated with officials for five years, to talk.

The question is whether a moderate Tamil leader can emerge, given the number who have been killed. Tamil moderates speak of no "political space" to work in. "Neelan exemplified this political space more than any other," says a friend of Tiruchelvam's who did not wish to be identified. "When you have extremism, your main targets are moderates who can work in the system and change people's perceptions. That's why Neelan was eliminated."